If retirement is just around the corner, the current financial climate may make you feel a little uneasy. Watching the markets fluctuate might leave you worrying about whether your superannuation will be enough to see you through.

It’s not a time for hasty moves, though.

If you are concerned a calm review of your current portfolio and investment strategy may be helpful.

After all, the average Australian spends around 20 years in retirement, so it’s important to create a retirement strategy that takes account not only the current market conditions but also the risks and opportunities in the years ahead.

As one of the most significant retirement assets, your superannuation needs a carefully considered assessment as you approach any new life stage.

Here are five useful tips to help ease you into the next chapter towards retirement.

1. Review your risk profile and portfolio allocation

Check your super portfolio’s risk profile. Generally speaking, investors take a high-growth approach when they’re younger to take advantage of higher returns, however, as with normal share market cycles, there will be fluctuations in the share market. Having a long-term strategy gives you the time to recover from any market downturns before retirement.

Older investors may prefer a more conservative investment strategy that can help to stabilise returns by potentially protecting super from share market volatility.

2. Calculate retirement expenses

Be realistic about the living expenses you’ll need when you finish working. For some, it may cost less to live in retirement because of reduced expenses such as commuting costs and maintaining a work wardrobe.

On the other hand, you may plan to travel more or buy a new vehicle or renovate your home, so these expenses need to be factored in when working out how much you’ll need.

According to the Association of Superannuation Funds of Australia (ASFA), the annual average budget to maintain a comfortable lifestyle in retirement is $73,077 for a couple and $51,805 for a single person.

And to maintain a modest lifestyle, ASFA estimates a couple will need $47,470 and a single person will need $32,897. Both estimates assume you already own your own home.

You can find easy-to-use tools on the MoneySmart website to help you work out your budget and also estimate your income from super and the Age Pension.

3. Take action on mortgages and loans

Entering retirement with manageable or small levels of debt can contribute to feeling more financial stable.

If you’ll still be repaying a mortgage after you’ve retired, you could consider downsizing your home or using superannuation funds to pay down the debt, keeping in mind the tax implications and ensuring that you comply with superannuation laws. If you’re considering either of these courses of action, we’d be happy to explain your options and obligations.

4. Check your timing

Understanding when and how you can access your super is important.

You can use your super to fund your retirement when you reach “preservation age”, which is from age 60. You can also use your super to begin a transition to retirement income stream (TRIS) while continuing to work.

Alternatively, if you continue working beyond preservation age, you can withdraw your super once you turn 65.

There are also some circumstances in which you can access your super early such as illness and financial hardship, however, eligibility requirements do apply.

5. Decide how to withdraw your funds

You may be able to withdraw your super in a lump sum, if your fund allows it. This could be the entire amount you have invested, or you could receive regular payments.

If you ask your fund for regular payments (paid at least once a year), it is known as an income stream and your super account transitions from the accumulation phase – where contributions are made – to a pension.

There are minimum withdrawals that you must make once you commence an income stream from super. For example, for those aged under age 65, a minimum annual withdrawal of 4% of your super balance is required and this drawdown rate increases as you get older.^iv

There is a lot to think about as you approach retirement, so if you’d like to discuss your retirement income options, please give us a call.

Renting out your property or holiday home

If you rent out property, you need to:

• keep records right from the start
• work out what expenses you can claim as deductions
• work out if you need to pay tax instalments throughout the year
• declare all rental-related income in your tax return
• consider the capital gains tax implications if you sell.

If you have an investment property that isn’t rented or available for rent, such as a holiday home, then you generally can’t claim deductions because it doesn’t generate rental income.

If you invest in (buy) a rental property or holiday home, you will need the date of purchase and costs of buying the property as part of your records. The date you enter into the contract is the purchase date (not the settlement date) for capital gains tax purposes.

Co-owning rental property

If you co-own the property you will need to know your ownership interest, to make sure you:

• keep the right records
• report the correct share of the rental income
• claim the correct amount for expenses you incur.

Buying a home

If you buy a home (your main residence), you should also keep records. You will need these records to make sure you don’t pay more tax than you need to, if you later decide to:

• make your residential property available for rent
• rent out all or part of your home through the sharing economy
• use all or part of your home to produce income.

Investment or business

Most rental activities are in the form of an investment. See, Rental property as investment or business, to work out if your activities amount to:

• carrying on a business
• a domestic arrangement
• sharing part of your home
• normal commercial practices.

If you are investing in property you intend to rent out as affordable housing, there are registration requirements and criteria you need to meet.

Foreign resident investors

If you are a foreign resident or a temporary resident and you plan to invest in residential rental property, you will first need to:

• apply for approval, pay the application fee and wait to be approved before you make a purchase
• keep the right records
• report the correct share of the rental income.

Talk to us if you have any questions.

Source: ato.gov.au June 2024
Reproduced with the permission of the Australian Tax Office. This article was originally published on https://www.ato.gov.au/individuals-and-families/investments-and-assets/property-and-land/residential-rental-properties/owning-and-renting-a-property-or-holiday-home
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For Australians approaching retirement, recent market volatility may feel like more than just a bump in the road.

Unlike younger investors, who have time on their side, retirees don’t have the luxury of waiting out downturns. A sharp dip just before, or as you begin drawing down your superannuation, can leave lasting damage.

It’s not just about watching your super balance dip.

The real danger comes if you need to start withdrawing funds during a slump. Doing so can lock in losses and make it harder for your remaining savings to recover. The timing of poor market returns is known in finance circles as “sequencing risk”. And it can shorten the life of your retirement savings.

What’s going on in markets?

So far in 2025, global shares as measured by the MSCI World Index have fallen 4.6%. Concerns over stubborn inflation and trade tensions that will hurt growth are keeping investors on edge.

If your superannuation is in a “balanced” option, with diversified investments in stocks, bonds, private markets and cash, your balance will have fallen by less than this amount.

Zoom out and the story looks better. Over the past year, total returns for the MSCI index remain strong, up 6.5%.

It’s a reminder that downturns are often followed by rebounds. We saw this during the COVID crash in 2020, when markets plummeted, only to recover more than 50% over the following year.

Still, for those nearing retirement, the timing of these dips matters more than the averages. Uncertainty makes planning all the more crucial.

Is your super still in high gear?

Many Australians don’t know exactly how their super is invested. Most people are in default “balanced” or “lifecycle” options, which automatically shift from high-growth assets like shares to safer investments like bonds and cash as retirement approaches.

This design helps cushion your balance from big market hits as you near retirement. But if you’ve chosen a high-growth option or haven’t reviewed your investment settings in years, you could still be heavily exposed to volatility.

In that case, now’s the time to consider your options:

• delay retirement by a year or two to give your portfolio time to recover
• move to part-time work instead of retiring fully, reducing how much super you need to draw down
• review your budget. You can’t control the markets, but you can control your spending plans.

Don’t panic – reacting emotionally can cost you

When markets fall, it’s natural to feel the urge to switch your portfolio mix from stocks into cash. But this can turn temporary losses into permanent ones.

Instead, consider more measured steps. Transition-to-retirement strategies let you draw a partial income while keeping most of your super invested.

Annuities – which offer guaranteed income for life or a fixed term – are another option. Newer products also address longevity risk, which is the risk of outliving your savings.

What does a 5% drop really mean?

Let’s say you’re 65 and have a super balance of A$200,000 (for men, that’s roughly the median; for women, it’s lower due to factors like lower lifetime earnings and career breaks).

A 5% fall translates to a $10,000 loss. That might not seem huge, but if you were planning to draw down 5% of your balance annually – about $10,000 a year – that loss could effectively wipe out an entire year’s retirement income.

It doesn’t stop there. If left invested, that $10,000 could have continued to grow. Over a 20-year retirement, and assuming a 5% annual return, that $10,000 could have grown to over $26,000.

For retirees with smaller super balances or higher withdrawal rates, the impact of a market dip can be even more significant.

Many experts now expect long-term returns to be more modest than in recent decades. Ageing populations, climate change and shifting global dynamics are likely to weigh on growth.

This makes it even more important to avoid switching entirely into cash, which can erode your savings through inflation over what could be a 20- or 30-year retirement.

A smarter path to retirement

The best approach is to gradually shift your investments in the years leading up to retirement – not all at once in response to a market dip. Lifecycle options do this automatically, but if you’re managing your super yourself, it’s worth getting advice.

Your super fund’s website likely offers tools and calculators to help. ASIC’s MoneySmart retirement planner is another great resource. And don’t underestimate the value of calling your fund to ask:

• How is my super invested?
• Does this match my age and risk tolerance?
• What are my options if I want to make changes?

The bottom line

Retiring in a volatile market isn’t easy, but panic isn’t a plan. By understanding your investment mix, taking advantage of flexible retirement strategies, and seeking advice when needed, you can navigate uncertainty more confidently.

Planning for retirement isn’t about avoiding all risk – it’s about managing it. With the right tools and mindset, you can stay on course, even when markets wobble.

Source: https://theconversation.com/markets-are-choppy-what-should-you-do-with-your-super-if-you-are-near-retirement-255017

Stay up to date with what’s happened in the Australian economy and markets over the past month.

Wars in Europe and the Middle East, volatile oil prices and shifting US policies are making headlines – but failing to dampen market optimism.

The ASX closed the financial year with a near 10% return – its strongest since the COVID-19 crisis and despite US tariff threats.

Despite tariff risks for the US economy, the S&P 500 index surged to a four-month high on hopes of future rate cuts and smooth trade negotiations.

Click here to view our update.

Please get in touch on 03 9723 0522 if you’d like assistance with your personal financial situation.

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Email: integrityone@iplan.com.au

Telephone : 03 9723 0522

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This information is of a general nature and does not take into consideration anyone’s individual circumstances or objectives. Financial Planning activities only are provided by Integrity One Wealth Advisers Pty Ltd (ABN 35 994 727 125) is a Corporate Authorised Representative (1316489) of Integrity Financial Planners Pty Ltd (AFSL 225051). Integrity One Planning Services Pty Ltd and Integrity One Accounting and Business Advisory Services Pty Ltd are not liable for any financial loss resulting from decisions made based on this information. Please consult your adviser, finance specialist, broker, and/or accountant before making decisions using this information.